When I first signed up for a seller's account on eBay, I remember being given the option of submitting a credit card number or my checking account information. I'm used to paying for things online with a credit card, but the thought of giving eBay access to my checking account gave me pause. Of course, I write checks for everything from gas to groceries, and I often tuck a check into a birthday card for a relative. Yet I'm still suspicious of disclosing to just anyone my personal bank account number and the bank's routing number at the bottom of a check. Like my passwords, my Social Security Number, my age, and my unlisted phone number, I'm afraid that personally identifying information can fall too easily into the hands of those who might exploit it at my expense.
So it seems strange that eBay, in its list of accepted payment methods (http://pages.ebay.com/help/policies/accepted-payments-policy.html) includes bank-to-bank transfers. In this kind of payment (also known as bank wire transfers or bank cash transfers), the funds are debited directly from a buyer's checking account and transferred to the seller's checking account: Do not pass Go, do not give PayPal a chance to collect its fee. PayPal might be eBay's preferred payment method, but as sellers know, it's hardly free. Is it worth considering direct checking account transfers as a payment method, and if so, how can you do it safely?
It doesn't seem like checking account transfers should be less safe than any other payment method. After all, when I pay for things online, I usually use my debit card, which was issued to me by my bank - it debits my checking account. Some of the other methods included in eBay's "approved" list are not always safe and reliable, like C.O.D. (Cash on Delivery) or cash. eBay specifies that these are okay for in-person transactions, but occasionally you get a buyer who asks to use one of these methods. Experienced eBay buyers and sellers agree that Western Union wire transfers are risky (in fact, eBay bans sellers from stating that they accept wire transfer services like Western Union). Nobody I know uses C.O.D. (Cash on Delivery), although I once received an envelope from one of my customers that was stuffed full of bills and coins.
So what's the problem with bank-to-bank transfers? They seem to be more popular in Europe than they are in the U.S. Andrew Titcombe, who sells records, CDs, DVDs, books, and other music memorabilia on eBay UK under the User IDs crucialmusic and crucialvinylalbums, says, "I accept bank transfers from people with 20-plus positive feedbacks - but only if I am specifically asked."
He doesn't advertise bank wire transfers in his terms of sale, in other words, which gives him the option of saying no. One seller I respect, Kimberly King (User ID: HigherGroundz) wouldn't hesitate to give the thumbs-down: "I would be wary of having anyone have my bank account info - seems a bit risky. What happens if there is a dispute over something - would they freeze your whole account? Frightening!"
Here's another thing that's scary: my own bank charges $12 for me to receive an incoming wire transfer, unless an account holder has $75,000 or more on deposit.
Aaron Rosen, a personal banker in my home town of Chicago, says he understands why the U.S. might be lagging behind Europe when it comes to bank transfer payments in particular and auction payments in general: "The success of online payment processing sites like PayPal is directly correlated to the failure of traditional banking institutions to accommodate rapid payments and transfers between individual accounts. As a matter of course, financial institutions in the US have always been more stodgy and traditional, more regulated and more cumbersome when it comes to ease of use and convenience than their European and East Asian counterparts."
Many U.S. financial institutions are now offering online processing of outgoing wire transfers, but the degree to which fraud has been perpetrated against the general public by a small band of online criminals is staggering. For this reason alone, Rosen does not recommend taking payments via wire transfer. "The problem with bank transfers is one of security - both the security of a person who relays their personal financial information to a remitter of a payment, and our national security with regard to the monitoring of bank transfers," he says.
Maybe the solution to this problem is just as easy as setting up different email accounts for different purposes. Andrew Titcombe keeps only a small amount of money in a special checking account dedicated to receiving eBay payments. "I am not willing to quote my bank details on an eBay listing, and I never offer the service as such. However, my policy is to always try to accommodate a buyer. So in response to a request, I'm prepared to give out the bank account number from my No 2 account (not the main account). Most of these requests come from Germany, with the odd one from France. I am still uneasy with this method and prefer the security of PayPal, even though it is more expensive," he says.
